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2023-TIOL-1069-CESTAT-DEL
L G Electronics India Pvt Ltd Vs Pr.CC
Cus - Appellant had imported 2000 units of "G Watch (Smart Watch)" [ LG Watch W7 ] and classified the same under CTH 91021900; basic customs duty @ 'NIL' BCD after claiming the benefit of entry serial no. 955 of Notification No. 152/2009-Cus -IGST @18% was paid -Department viewed that the “G watch” is capable of performing many functions other than those related to time keeping and, therefore, they are correctly classifiable under CTH 8517 6290 and in respect of which classification the benefit of Nil BCD is not available -SCN was issued demanding Customs duty of Rs.86,62,852/- - Demand was confirmed along with imposition of penalty and interest and ordering confiscation of goods (and imposition of redemption fine) -Aggrieved with this order dated 07.10.2020 passed by Principal Commissioner, the present appeal.
Held: Smart watches typically integrate with a user's smart phone - Many of the same features and applications available on the phone are available on the watch and can synchronize with it - Watches and clocks of Chapter 91 are designed mainly for time and date display though with some extra elements but nothing related to transmission of data in any form - Whereas the smart watch is actually a computer, an apparatus which is capable of transmitting and receiving data, irrespective of fact that it is a device wearable on wrist just like watch and is capable of time telling also - It is apparent from the brochure that the impugned G-Watch is to be paired with the companion device which is running Android and supports Bluetooth and which wears the operating system by Google - The companion device has to be connected to mobile data or a Wi-fi network - It is observed that to set up the impugned G-Watch for the first time, a data connection is mandatory -Thus, in addition to the looks of the impugned product which is almost similar to a watch/clock having two hands with quartz movement meant for telling time and even a chronograph, the impugned good can be used to ( i ) can send and receive a text message,(ii) user can make and receive telephonic calls of his mobile phone at this product, (iii) can download and open any app (application) on the app screen, (iv) the home screen can be used as compass, stopwatch, timer, calibration, barometer and LT meter, the functions similar to that of watch,(v) have Google fit App to view the workout reports, (vi) it takes tasks using voice commands as it has a built in google assistance. However for the purpose, a data or Wi-fi connection is required on the companion device and device must be in a Bluetooth range, (vii) While using the Bluetooth the impugned G-Watch can be connected to other mobile devices including the added wi-fi networks; (viii) it provides upon source software information - Specific features of the impugned imported product make it clear that the main function of this device is not just time keeping or time watching but to work as a portable/wearable device as an organizer which is capable of transmitting or receiving data in the form of voice or images plus it is an apparatus for communication in a wired or wireless network - Chapter 91 talks about watches/clocks mechanically or electronically operated for respective display whether or not automatic and whether or not stop watch - Thus any gadget/apparatus or machine having any features in addition to above cannot be classified as watch/clock - Hence irrespective that the product is wearable on wrist and that it has two metal hands with mechanical/quartz movement to show time, it cannot be called as clock and watches as are classifiable under Chapter 91 - Products of Chapter 91 have a specific purpose of timekeeping / time telling with certain advance functions but related only to time - Nothing in Chapter 91, either Chapter headings or Tariff entry headings, suggests that a watch which is capable of transmitting data or which is working on operating system of Google or which has anything to do with wired or wireless network shall still fall under this Chapter 91 - On the contrary, Chapter 85 notes suggest that anything which works on electronic integrated circuits, microprocessors, smart cards, Random Access Memories (Ram), digital system, signals, such apparatus are all covered under Chapter 85 - Hence, First point of adjudication stands decided in favour of Revenue holding the right classification for the impugned imported product is 8517 6290 - As the goods are classifiable under 8517 6290, the benefit of Nil rate under the said notification 152/2009-Cus shall not be available to the appellant - The certificate for origin is not sufficient to extend the benefit of nil rate of duty: CESTAT
Penalty - Imposition of penalty is a penal consequence of some intentional mala fide act - The onus was of the department to prove that the wrong classification was an intentional act of the appellant to wrongly claim duty exemption - Mere mention of wrong tariff or claiming benefit of an ineligible exemption notification cannot form the basis for confiscation of goods - It is a clear case of misunderstanding on part of the appellant - Question of invoking penal provisions does not at all arise in this circumstance: CESTAT
Conclusion: Held that the product imported is a Smart Watch which is classifiable under 8517 6290 - The appellant has wrongly classified it under 9102 1900 - Thus the benefit under exemption Notification No. 152/2009-Cus. was not available to products of 8517 - The order under challenge to the extent confirming demand of customs duty is, therefore, upheld - However, the order imposing penalty and confiscating the goods is hereby set aside - Consequently, the appeal is partly allowed: CESTAT [para 6.3, 6.6, 6.8, 6.9, 6.12, 7, 8, 9]
- Appeal partly allowed: DELHI CESTAT
2023-TIOL-1068-CESTAT-BANG
Glass House Vs CC
Cus - The Assessee, M/s. Glass House filed a Bill of Entry No. 238994 dated 12.01.2009 for the clearance of "Dark Green Reflective Float Glass" which was imported from China - On examination, the officers found that as per the Notification No.4/2009 Cus. dated 06.01.2009, the imported goods were liable for anti-dumping duty, however since the Assessee disputed leviability, the goods were cleared with a provisional bond - On finalisation of provisional duty, the original authority confirmed the duty amount of Rs. 1,50,649/- along with interest under Section 18(3) of the Customs Act 1962, in view of the Notification No.4/2009 Cus. dated 6.01.2009 - The Commissioner (Appeals) also confirmed the anti- dumping duty on the ground that there was a specific exclusion for Reflective Glass from the purview of the anti-dumping duty under Notification No. 165/2003-Cus. dated 12.11.2003, but Notification No.4/2009 dated 06.01.2009 there was no such exclusion for Reflective Glass - Aggrieved by this order, the Assessee is before the Tribunal only on the limited ground that they are not liable to pay anti-dumping duty in as much as prior and after to the Notification No.4/2009 dated 06.01.2009 as there was admittedly no anti-dumping duty and therefore, for the relevant period there appears to be an omission in the Notification in not excluding the Reflective Glass from the anti-dumping duty.
Held - The limited issue to be decided is whether the importer is eligible for the benefit of exemption from anti- dumping duty during the relevant period i.e., from 06.01.2009 to 22.05.2009 - As can be seen from the above Notification No.165/2003- Cus. dated 12.11.2003 read that the "Float Glass of thickness 2 mm to 12 mm (both thickness inclusive) of clear as well as tinted variety (other than green glass) but not including reflective glass, processed glass meant for decorative, industrial or automotive purposes have been exported to India from the subject countries below their normal value". Whereas, the Designated Authority, vide its Notification No. 15/1/2007-DGAD, dated the 13th December, 2007, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 13th December, 2007 had initiated a sunset review in the matter of continuation of anti- dumping on imports of Float Glass of thickness 2mm to 12mm (both inclusive) of clear as well as tinted variety (other than green glass) but not including processed glass meant for decorative, industrial or automotive purposes (hereinafter referred to as the subject goods), falling under heading 7005 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)." - It is seen that though the Notification No.165/2003-cus. dated 12.11.2003 and Notification No.51/2009-Cus. dated 22.5.2009 excluded reflective glass from the levy of anti-dumping duty whereas the Notification No.4/2009-Cus. dated 06.01.2009 did not exclude Reflective Glass - As claimed by the Assessee, there could be an omission but that omission cannot be set right by the Customs authorities in as much as the Customs Notifications are issued only on the basis of the findings of the DGAD and their notifications - As per the observations of the Supreme Court in re Dilip Kumar , the question of interpreting the exemption Notification has to be done in the manner specified in the Notification - In the present case, since Reflective Glass is not found in the Notification No.4/2009- Cus. dated 06.01.2009 for exempting them from anti-dumping duty, question of extending the benefit does not arise - The Commissioner (Appeals) has rightly held that no attempt can be made to infer the motive or meaning of the Notification other than what is emanating from the plain language of the Notification - Hence the order passed by the Commr.(A) is upheld: CESTAT
- Appeal dismissed: BANGALORE CESTAT
2023-TIOL-1067-CESTAT-KOL
Asian Leather Pvt Ltd Vs CCGST & CE
ST - Appellant-Company received services by way of grant of long-term lease of industrial plots from the State Government Industrial Development Corporation/undertakings i.e. KMDA and paid service tax of Rs. 23,72,884/-on 04.5.2015 at the taxable value of Rs. 1,91,98,094/- paid to KMDA - The refund has arisen because of the Exemption Notification No.41/2016-Service Tax dated 22.9.2016 and the said exemption has been extended to prior period by section 104 of the Finance Act 1994, by the Finance Act 2017 for the period 1.6.2007 to 21.9.2016 - Consequent to issue of Notification No. 41/2016-Service Tax dated 22nd September, 2016 by Ministry of Finance, the Appellant wrote a letter dated 02.12.2016 to KMDA claiming refund the service tax amount and to provide the details of Service Tax deposited by them to Service Tax Authority such as Challan No, Date etc - As the Appellant paid the service tax to KMDA, they sought the refund from KMDA - The KMDA vide their Memo No. 1039/KMDA/Estate/MM/EC-3/98, dated 16th March, 2017 issued the Challan evidencing payment of Service Tax by them to the Department and advised the Appellant to seek the refund from Service Tax department as the tax collected by them was deposited in the Govt. Account by them - The Appellant then produced the same before the Service Tax Department, who advised them that Service Tax Refund claim was to be submitted only by the Assessee i.e. KMDA who had deposited the Service Tax and not by the Appellant - The Appellant once again wrote to KMDA vide letter dated 27th March, 2017 requesting them to claim the refund - The KMDA, on receipt of the above letter kept silent for a long time and after a number of follow-ups finally informed the Appellant that they were not in a position to claim the service tax refund from Service Tax Authority - Accordingly, the Appellant filed a refund application for Rs.23,72,844/- on 27.09.2018 along with the relevant documents before the Assistant Commissioner of CGST & CX, Ballygunge Division, Kolkata South Commissionerate which was subsequently transferred to Tollygunge Division being the proper jurisdiction for processing of the refund claim - On scrutiny of refund claim, a deficiency memo was issued to the Appellant on 04.12.2018 wherein the Appellant was asked to submit relevant documents with clarifications in support of the refund claim, which the Appellant submitted on 15.01.2019 - Subsequently, a Show Cause Notice was issued to the Appellant proposing to reject the refund claim on the time bar ground - Adjudicating Authority passed the Order-in-Original dated 03.02.2020, wherein he rejected the claim on the ground that the refund claim was filed beyond the period of six months as prescribed under Section 104(3) of Finance Act, 2017 - On appeal, the Commissioner (Appeals) upheld the rejection on the same ground vide impugned order dated 30.03.2022 - Hence the present appeal.
Held - Normally, the refund application is to be filed with the Service tax Department - But, the Appellant in this case has not paid the service tax directly to the Service tax Department - They paid the service tax to KMDA, who paid the tax in the Government Account - Accordingly, the Appellant wrote letter dated 02.12.2016 to KMDA claiming refund the service tax as they have paid the service tax to KMDA - As advised by KMDA, later they sought the refund from Service Tax department as the tax collected by them was deposited in the Govt. Account by KMDA - The Service Tax Department advised them that the Service Tax Refund claim was to be to be submitted only by the Assessee i.e. KMDA who had deposited the Service Tax and not by the Appellant. As the refund claim was not considered neither by KMDA nor by Service Tax Department, with no alternative they filed the refund application with the Service Tax Department for the refund of service tax of Rs.23,72,844/-paid by them on 27.09.2018, which has been rejected as time barred by the order - It is observe that the Appellant made sincere effort to file the refund claim well within the time limit of six months prescribed in Section 104(3) - The delay in filing the refund with the Service Tax Department was only due to inaction by the Service Tax department and improper advice by KMDA - They have filed the refund claim well in time with KMDA with whom they paid the Service Tax - As the Notification 41/2016 was not clear with whom the refund application was to be filed, the delay has happened - Thus, it is held that the delay in filing the refund application with the Service Tax Department was not due to the fault of the Appellant - The Appellant could have filed the refund claim within the stipulated time, but not filed it. However, in the present case, the delay was not account of any fault on the part of the Appellant - Thus, it is held that the decision in the case of MDP Infra(India) Pvt. Ltd. Vs Commissioner of Customs, C.Ex and CGST cited by the A.R.is not applicable to the present case on hand - Thus, by following the decision of Madras High Court in the case of Grand Technologies , it is held that the rejection of refund claim filed by the Appellant on the ground of time bar is legally not tenable - Accordingly, the order rejecting the refund claim on time bar ground, is set aside - I hold that the Appellant is eligible for sanction of the refund by ignoring the time bar aspect as held by the Madras High Court in the case of Grand Technologies: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-1066-CESTAT-KOL
Laxmi Narayan Transport Vs CCGST & CE
ST - Dispute revolves around the issue as to whether services provided by appellant qualify as "cargo handling services" as contended by Revenue or "Goods transport agency services" as contended by appellant - Appellant was engaged by M/s. SSTAPL as a subcontractor to provide transportation service to M/s. JSL and for period January 2015 to March 2017, appellant started providing GTA services directly to M/s. JSL - During both the periods, M/s JSL has paid service tax under GTA service as recipient of service - After successful completion of job and necessary certification by M/s. JSL, appellant raised invoices on M/s. SSTAPL for "Transportation and Unloading of Coal from Sukinda Railway Siding to JSL, KNIC" - Appellant did not issue any 'Consignment Note' in name of consignee M/s. JSL - After loading of goods into Rakes, 'Consignment notes' were issued by M/s SSATPL to M/s. JSL, the consignee - Service tax as applicable was duly discharged under reverse charge by M/s. JSL on GTA Service - The said service rendered by appellant to SSTAPL duly qualifies under negative list and lies outside the ambit of Service tax - Accordingly, appropriate service tax has been rightly paid by consignee under GTA service as recipient of service - Hence demand raised on appellant under 'Cargo handling service' during period April 2012 to December 2014 is not sustainable - During period January 2015 to March 2017, appellant started providing services directly to M/s. JSL w.e.f. January, 2015 - Appellant issued 'Consignment notes' to M/s. JSL and invoices were raised directly to M/s. JSL - Service tax under reverse charge was duly discharged by M/s. JSL on GTA service - Principal work is related to transportation with handling of inward and outward rake cargo from JSL railway sidings to its plant and vice-versa - The contract charges are cumulative on per metric tonne basis - The rake wise bill is to be submitted on weekly basis - Appellant has relied upon various decisions in support of their contention that a single contract cannot be vivisected for purpose of demanding service tax - Another point raised in impugned order is that separate charges have been given for GTA service and other facilitation works performed by Appellant in Work orders - Charges are indicated separately only for sake of convenience - This will not change the nature of service performed - The services provided by appellant to their other clients comprised of only handling charges and not transportation - Thus, the finding vide impugned order that Service tax has been discharged in all cases except where JSL is involved is distinguishable on facts itself and therefore grossly incorrect - The service provided by appellant during period January 2015 to March 2017, directly to M/s. JSL w.e.f. January, 2015, was GTA service and not 'Cargo Handling service' - Accordingly, appellant is not liable to pay service tax under category of 'Cargo handling service' and service tax on said GTA service has been rightly paid by recipient M/s. JSL - Hence, demand confirmed against appellant for this period is not sustainable - The Appellant has raised the issue of limitation also - There is no suppression of fact involved in this case and hence demand confirmed by invoking extended period of limitation is not sustainable - Accordingly, demand confirmed in impugned order is liable to be set aside on ground of limitation also - Service rendered by appellant to M/s SSTAPL as a sub-contractor as well as M/s JSL directly, was transportation of goods service and not cargo handling service - Accordingly, demand confirmed in impugned order under 'cargo handling service' is set aside on merit as well as on limitation - Since, the demand itself is not sustainable, question of demanding interest and imposing penalty does not arise: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-1065-CESTAT-KOL
Eminent Healthcare and Cosmetics Pvt Ltd Vs CCE
CX - The Assessee-company manufactures Cosmetics falling under Chapter 33 of the Central Excise Tariff, 1985 - The Assessee has been availing the benefit of Notification 32/99-CE dated 08.07.1999 - NN-32/99-CE was brought into effect wherein excise duty exemption was granted to goods cleared from units located in Export Promotion Industrial Parks (EPIP) in the State of Assam - The exemption was available to new industrial units which commenced its commercial production on or after 24.12.1997 - In terms of the notification, the exemption was given effect to by refunding the entire amount of excise duty paid by an assessee using its account current (PLA) - The Appellants set up manufacturing plants at Bamunimaidan Industrial Estate, Guwahati and started their commercial production - The entire excise duty paid by the Appellants during this period was paid using account current (PLA) - The Appellants took refund of such excise duty paid through PLA which was also allowed by the proper officer as the same was in compliance of the notification - The CENVAT credit availed by the Appellants on inputs and capital goods during such period kept on accumulating - NN-61/2002-CE was brought into effect amending NN-32/99-CE - By this amendment, a manufacturer was only allowed refund of excise duty paid through PLA after utilizing the entire amount of CENVAT credit availed of - Later, NN- 42/2002-CE (NT) was also brought into effect amending Rule 3 of the CENVAT Credit Rules, 2002 - By this amendment, it was stipulated that CENVAT credit of duty paid on inputs of the final product cleared after availing exemption under NN-32/99-CE shall be utilized only for payment of duty on final products cleared after availing exemption under the said notification - Thereafter, vide Circular No. 683/74/2002-CX it was clarified that amendments made by NN- 61/2002-CE and NN- 42/2002-CE (NT) were done in order to prevent unintended benefit of higher amount of refund and also to stop diversion of credit - The Appellants accordingly amended their system and started utilizing CENVAT credit for payment of duty on clearance of its final products - The entire accumulated CENVAT credit as on 22.12.2002 was utilized by the Appellants during this period, leading to the scenario of Nil refund during the period February 2003 to May 2003 - The Finance Act, 2003 was notified - Vide Section 153(1) of the Act the amendment made by NN-61/02-CE was given retrospective effect from the date of bringing into effect NN-32/99- CE that is w.e.f. 08.07.1999 - Therefore, the restrictive condition brought into effect for the very first time vide NN-61/02-CE will deem to always have been in place right from the 08.07.1999 - Again, vide Section 153(4) of the Act, the department was empowered to recover inter alia any amount of duty which has been refunded but which would not have been refunded, within 30 days, if the restrictive condition brought in by NN-61/2002-CE was applicable, right from 08.07.1999 - Similarly, retrospective effect was given to amendments made in Rule 3 vide NN- 42/2002- CE (NT) vide Section 152 of the Act - Thereafter, the Deputy Commissioner of Central Excise, Guwahati by exercising the power under Section 153(4) of the Finance Act, 2003 passed Orders dated 02.06.2003 and 03.09.2003 confirming the demand of Rs.22,01,868/- together with interest amounting to Rs.15,65,611/- for the period 24.02.2000 to 22.12.2002 - On appeal the Commissioner (Appeals) passed the impugned order dated 13.02.2015, confirming the demands.
Held - As the issue involved is of a narrow campus, the appeal has been taken up for disposal with the assistance of the D.R. During the hearing, it is informed by the DR. that this bench has decided similar issue in the case of M/s Ozone Pharmaceuticals Limited Vs Commissioner of Central Excise and service Tax, Guwahati vide Final order No. 75782 0f 2015 dated 26.09.2023 , wherein the appeal filed by the Appellant was allowed -The ratio laid down in this decision is squarely applicable in this case as the facts and circumstances of the present case on hand is same as the case cited above - Thus, by following the ratio of this decision, it is held that the demand confirmed in the impugned order is not sustainable - Hence the order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2023-TIOL-1064-CESTAT-KOL
Godrej Consumer Products Ltd Vs CCE & ST
CX - The Appellant-company manufactures and supplies mosquito repellents falling under Chapter 38 of the First Schedule to the Central Excise Tariff Act, 1985 - The Appellant availed the benefit of Notification No. 32/1999-CE dated 08.07.1999 which granted 100% exemption on products manufactured and cleared from a unit located in North- Eastern region - Accordingly, Appellant was claiming refund of 100% excise duty paid in cash in respect of final products - The exemption Notification No. 32/1999-CE was amended vide subsequent notifications, viz. Notification No. 17/2008-CE dated 27.03.2008 (Notification 20/2007-CE dated 25.04.2007 and Notification No.20/2008-CE dated 28.03.2008 (effective from 01.04.2008), wherein the quantum of refund was restricted to the limit of value additions - The rate of central excise duty refund in respect of goods manufactured by the Appellant was reduced to 34% of total duty paid - However, the amended notifications came to be struck down by the High Court of Gauhati vide order dated 24.06.2009 - Thereafter, the Department went for an appeal before the divisional bench of the Gauhati High Court in W.A. No. 243/2009 whereby the High Court stayed the Single Bench order of the same court vide interim order dated 11.08.2009 - This interim order was further amended by the Bench vide its order dated 14.08.2012 to allow 50% of the amount due to the assessees, to bring the order in line with the interim order of the Supreme Court dated 13.01.2012 - Thereafter, the Division bench of the Gauhati High Court passed another order in which the order of the Single Bench came to be upheld - Against the order of the Division Bench, the Revenue approached the Supreme Court - Aggrieved by the said order, the Department went for an appeal before the Supreme Court - On 22.04.2020, the Supreme Court in the case of Union of India v. VVF Ltd. & Another, upheld the validity of the amended notifications issued to curtail the benefit of refund given under the area-based exemption notifications in North - Eastern states - Thus, the decision has the effect of reinstating/ restoring the Notification No. 17/2008-CE and 20/2008-CE, which was originally quashed by the High Court of Gauhati - The Appellant was under the impression that during the pendency of the issue before the Supreme Court, they did not have to apply for fixation of special rate of value addition since the amending notifications had already been struck down by the High Court - However, as a measure of abundant caution, they submitted applications for such rate fixation for the FY 2009-10 on 29.09.2010 (for each of the units), since the actual value addition of the goods manufactured by the Appellant was much higher than the percentage specified in the table of the notification i.e. 34% - However, the Commissioner of Central Excise, Guwahati vide the orders rejected the applications on the grounds that subject applications are barred by limitation inasmuch as Para 2.1(1) of the Notification No. 32/1999-CE (supra) and Para 3(1) of the Notification No. 20/2007-CE (supra) provides that such application must not be made later than the 30th day of September for the same financial year.
Held - The issue is no longer res integra as an identical issue has been decided by this Tribunal in the case of Hindustan Unilever Ltd. v. Commissioner of CX, ST, Dibrugarh , wherein it has been held that the application filed before the decision of the Supreme Court cannot be construed as time barred - Following the ratio of the decision cited above, it is held that the applications filed by the Appellant for fixation of special rates of valuation on 29.09.2010, for the FY 2009-10 for each of the units, is not time barred - Accordingly, the Tribunal set aside the impugned orders which rejected those applications on the ground of time bar: CESTAT
- Appeals allowed: KOLKATA CESTAT |
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